City Pub Group celebrates strong summer trade
This was revealed in the London-based operator's unaudited results for the 26 period to 25 June 2023.
The group operates a predominately freehold estate of 42 trading pubs and in addition has recently acquired a majority shareholding in Mosaic Pubs which have nine pubs located in London and Birmingham that are predominately freehold.
Over the summer, the business has continued to strengthen its financial position and trading has remained strong.
This is despite the poor weather in July and early August as well as the continuation of train strikes.
The group operates with one of the lowest levels of gearing in the whole hospitality sector with net debt of around £8m.
City Pub Group chairman Clive Watson said the company was in a strong position with very low net debt and what it believed was among the lowest gearing in the sector.
Strong second half
He added: “We look forward to a strong second half – Christmas bookings are significantly up and the company is well placed to take advantage of new acquisition opportunities.
“The Mosaic estate has been integrated and is showing significant increases in LFL sales. The economy remains challenging but we are well placed to take advantage of any future upturn.”
While its focus is on delivering organic growth, it is currently engaged in negotiations on a number of acquisitions.
The business’ strategy to premiumise its offer is delivering increased sales across its existing estate, and it has sought labour and purchasing costs efficiencies which have helped mitigate some, but not all, inflationary pressures.
Future plans
Looking forward, energy costs will be lower than last year for the company, with 60% of its energy now hedged to year end.
The second half of the year is traditionally the stronger trading period which includes more major sports events including the Rugby World Cup, the return of students to university as well as the Christmas trading period.
In H1, the company reported positive trading momentum, with revenue of £31.7m, up from £26.1m in H1 2022, as well as like-for-like (lfl) sales up 14%.
Despite inflationary pressures, pre-IFRS16 adjusted EBITDA level maintained at £3.3m (H1 2022: £3.4m).
The comparatives benefited from c.£800k of state aid mainly relating to lower VAT rates and business rates.
The adjusted profit before tax is £0.8m, versus £1.3m in H1 2022.
